DATE: 20000713
                                                   DOCKET: C31351
                   COURT OF APPEAL FOR ONTARIO
                CARTHY, GOUDGE AND O'CONNOR JJ.A.
                                
BETWEEN:                    )
                                   )    Judith Allen
SUN LIFE ASSURANCE COMPANY         )    for the appellant
OF CANADA                          )
                                   )
                    Applicant      )    Christopher Riggs
                    (Respondent    )    for the respondent
                    in appeal)     )    Sun Life Assurance Co.
and                                )
                                   )    Mark Contini
NATIONAL AUTOMOBILE,               )    for the respondent
AEROSPACE, TRANSPORTATION          )    Honeywell Limited/
AND GENERAL WORKERS UNION          )    Aerospace Division
OF CANADA (CAW-CANADA) 	           )
                                   )
                    Respondent     )
                    (Appellant)    )
                                   )
and                                )
                                   )
HONEYWELL LIMITED/AEROSPACE        )
DIVISION and MORTON G.             )
MITCHNICK                          )
                                   )
                   Respondents     )
                   (Respondents in )    Heard: December 19 and
                    Appeal)        )              20, 2000
On appeal from the judgment of the Divisional Court (Bell, Sharpe
and McKinnon JJ.) dated October 7, 1998.
GOUDGE J.A.:
[1]   The  Divisional Court heard this case together with  London
Life   Insurance   Company   v.   Dubreuil   Brothers   Employees
Association,  and  in both cases quashed the  arbitration  award.
Both  appeals were argued together and raise essentially the same
issue.  For the reasons given in London Life Insurance Company v.
Dubreuil Brothers Employees Association, 2000 OCA C31391 (“London
Life”),  I  would reach the same conclusion as I  did  there  and
dismiss this appeal.
[2]  The facts of this case are as follows.  An employee of
Honeywell Limited was cut off  long term disability benefits by
the insurer Sun Life Assurance Company.  These benefits were
payable pursuant to an insurance policy that the employer was
required by its collective agreement to continue in effect.  The
employee filed a grievance under the collective agreement
challenging the termination of his benefits.  The employer
contested the arbitrator’s right to hear the dispute.  The
arbitrator ruled that arbitration was the proper forum for the
determination of the benefit entitlement issue raised by the
grievance and that the union was entitled to join the insurer as
a party defendant to the arbitration proceedings.
[3]  The arbitrator reviewed the same case law canvassed in the
reasons of this court in London Life.  Relying particularly on
his reading of Pilon v. International Minerals and Chemical Corp.
(1996), 31 O.R. (3d) 210 (C.A.), he concluded that where, but for
the collective agreement the employee would have no claim to
benefits, any dispute concerning entitlement to those benefits
was within the exclusive jurisdiction of the arbitrator even if
the employer had fully complied with the collective agreement,
and there was only a dispute with the insurer about the meaning
of the policy.
[4]  In determining that he could take jurisdiction over this
dispute, the arbitrator expressly declined to embark on an
interpretation of the collective agreement to determine if it
would impose an obligation on the employer to pay the benefits
claimed in the grievance.
[5]  Rather, he contemplated a single proceeding in which he
could decide whether the insurer was responsible to pay the
employee these benefits pursuant to the insurance policy, or the
employer was responsible to pay the employee these benefits
pursuant to the collective agreement, or neither.
[6]  In essence the arbitrator determined that his exclusive
jurisdiction extended to both disputes on the basis of his
interpretation of the common law.
[7]  As indicated in London Life, I think his decision must
therefore be reviewed on a standard of correctness.
[8]  And for the reasons given in London Life, I do not think the
recent jurisprudence, in particular, Pilon, extends the exclusive
jurisdiction of an arbitrator to a dispute between an employee
and an insurer over the benefits it may be required to pay under
the insurance policy.  In taking jurisdiction on the basis that
as he did, the arbitrator erred in law and for that reason his
decision was correctly quashed.
[9]  Finally, as in London Life, I think the arbitrator erred in
joining the insurer as a party defendant given that there was no
dispute implicating the insurer properly before him.  His
decision was properly quashed for this reason as well.
[10] The parties have settled all of the issues raised by the
grievance except for the jurisdictional issue arising from the
arbitrator’s award which they agreed would be judicially
reviewed.  It is therefore unnecessary to remit the matter to the
arbitrator to undertake the interpretation of the collective
agreement that he declined to embark upon.
[11] In the result, I would dismiss the appeal with costs
including the costs of the motion seeking leave to appeal.
Released:  July 13, 2000
                                        “S.T. Goudge J.A.”
                                        “I agree J.J. Carthy J.A.”
                                        “I agree D. O’Connor J.A.”